Will the iPad Mini Suffer the Same Fate as the iPhone 5?

If you've tried to go out and buy an Apple (Nasdaq: AAPL  ) iPhone 5 anytime recently, you'll know they're rather hard to come by. Even now, over a full month after that device's launch, new orders placed on Apple's web site remain supply constrained and ship in three to four weeks. Yesterday, the iPhone maker unveiled its expected iPad mini. Is it destined to suffer the same fate?

NPD DisplaySearch analyst Richard Shim believes it will. In a blog post, Shim said he expects the iPad mini to be supply constrained from the get-go, with the source of production bottlenecks tied to display panel supply. Apple is reportedly working with two pairs of display suppliers and assemblers for the device: LG Display (NYSE: LPL  ) and Foxconn, as well as AU Optronics (NYSE: AUO  ) and Pegatron. Noticeably absent is Samsung; Apple is not tapping its frenemy for the 7.9-inch displays this time around.

As a relatively new supplier, AU Optronics is expected to be facing some challenges as it ramps up to the volumes that Apple needs. These are Shim's iPad unit monthly estimates for each panel supplier.

Supplier

September

October

November

December

LG Display

300,000

1 million

2.5 million

3 million

AU Optronics

100,000

400,000

800,000

1 million

Total

400,000

1.4 million

3.3 million

4 million

Source: NPD DisplaySearch.

If these figures are accurate, that totals 9.1 million iPad mini units through year's end, which happens to coincide pretty closely with prior reports that Apple had ordered 10 million units from its suppliers. That would be nearly double the 5 million Kindle Fire HD units that Amazon.com (Nasdaq: AMZN  ) has ordered. Amazon has said the new $199 model has quickly become its best-selling device by unit sales on its site, but the company (as per usual) refrained from elaborating with actual numbers.

Initial supply may be constrained for the iPad mini's global launch, but fortunately it looks like it should be able to ramp up fairly quickly.

Looking for more iPad mini guidance? We've just released an exclusive update that looks at just how important the iPad is to Apple, and how the iPad mini fits into the company's long-term goals of tablet domination. By picking up a copy of our premium research report on Apple, you'll learn everything you need to know about the launch and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple and Amazon.com. Motley Fool newsletter services recommend Apple and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 25, 2012, at 2:10 AM, ConstableOdo wrote:

    Every product Apple sells is in limited supply. That used to be a good thing for a company to have, but with Apple it's just a huge negative.

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